December 8

12/8 - The country is literally awash in milk. October milk output was up 3.7% from a year ago - the 10th consecutive monthly increase and the 3rd straight month of more than 3%. Unfortunately, dairy market intelligence is scarce. There’s been no Dairy Products (production) Report or Cold Storage Report since August due to the government shutdown. Nonetheless, it’s safe to speculate that production and supply numbers are robust by the fact that dairy product prices are in free-fall. Class III milk futures at $16.10/cwt (12/5) are at a 1½-year low and down from $23.26 in late Sept. CME block cheese at $1.38/lb is at a 2½-year low and down from $1.82 in late Oct. Lots of new cheese production capacity is helping absorb the extra milk – and the excess is being pushed into butter. CME butter at $1.4775/lb is down from highs of $2.62 this past summer and at its lowest level since Feb 2021. Call it an early holiday gift.